Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/192401
Year of Publication: 
2005
Series/Report no.: 
Discussion Papers No. 419
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper examines the effect of taxes on the individuals' choices of educational direction, and thus on the economy's skill composition. A proportional labour income tax induces too many workers with high innate ability to choose an educational type with high consumption value and low effort costs. This increases the skill mismatch and aggregate unemployment in the economy. The government can correct for this distortion by use of differentiated tuition fees or tax rates.
Subjects: 
Unemployment
matching
education
optimal taxation
tuition fees
JEL: 
J64
J68
H21
H24
Document Type: 
Working Paper

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